Home prices in Chicago rose 1.7 percent

Home prices in the Chicago metropolitan area rose 1.7 percent in August from June, and while over the year prices dropped 12.7 percent, that was an improvement over July's 14.2 percent annual decline, the latest Standard & Poor's Case Shiller report showed.

The report revealed improvements in the housing market across the country. Month-over-month, the 10-city composite rose 1.3 percent and the 20-city composite climbed 1.2 percent.

The annual rate of decline of the 10-city and 20-city composites improved over July, marking approximately seven months of better readings. The 10-city composite declined 10.6 percent, and the 20-city composite dropped 11.3 percent. That compares to respective annual declines of 12.8 percent and 13.3 percent in July.

"Broadly speaking, the rate of annual decline in home price values continues to improve," said David Blitzer, chairman of the Index Committee at S&P. "The two composites and 19 of the 20 metro areas showed an improvement in the annual rates of return. Looking at the monthly data, 17 of the areas and both composites saw price increases in August over July."

While noting the improvements, Blitzer cautioned that the pending expiration of the $8,000 first-time home buyers tax credit and anticipated higher unemployment rates could cause problems in coming months.

"Both may have a dampening effect on home prices," he said.